referral

Referrals are recommendations or directions that connect a person with a product, service, or professional who can help. In business contexts, a referral occurs when a customer, partner, or intermediary suggests a company to someone who may benefit, sometimes triggering a sale or engagement. In healthcare, a referral is a formal process in which a clinician directs a patient to another clinician, facility, or service for specialized evaluation or treatment. Referrals can be informal, such as a casual suggestion, or formal, with documentation and tracking in records.

Common types include internal referrals within an organization, external referrals to outside providers, and marketing referrals generated through programs that reward introducers. A typical referral involves three elements: a recommender, a referred party, and the product or service being connected. Tracking mechanisms—such as referral codes, unique links, or CRM notes—are used to attribute outcomes to the referrer.

Referral programs are a common marketing tool, offering incentives like discounts, credits, or commissions to encourage word-of-mouth recommendations. In regulated fields, referrals may be subject to disclosure, privacy protections, and other rules to prevent improper influence or kickbacks.

Benefits include lower customer acquisition costs, faster trust-building, and extended reach through networks. Challenges include the risk of fraudulent referrals, misaligned incentives, and variability in program quality or fairness across partners.

Overall, referrals leverage social trust to connect potential clients or patients with appropriate services, often supported by systematic tracking and, where appropriate, formal guidelines and compliance measures.